Medicaid Payment

Medicaid is a program that provides medical assistance to low income families and financially vulnerable persons. Medicaid is the largest source of medical assistance for America’s low income population. In 2001, the program offered medical assistance to more than 46 million people, and in 2003, the program made direct payments of over $197.3 billion. It is important, however, to note that Medicaid payment, services and eligibility policies vary from state to state.

According to the national guidelines provided by Federal statutes and policies, every state in America:

• Is allowed to create its own eligibility criteria
• Establishes the amount, duration, type as well as the scale of services provided in that particular state.
• Establishes its rate of payment for the provision of Medicaid services.
• Is responsible for the management and running of its program

The eligibility, services and Medicaid payment for services are complicated since the regulations vary from one state to another. A person may be entitled to Medicaid in one state but may not qualify for one in another state. More so, the services offered in one state may not be the same services offered in another state. In addition, the cost and duration may not be the same in different states. It is also important to note that Medicaid eligibility, services and costs in a state can change during that year.

Medicaid payment for any services provided may be made directly to providers or the state may decide to make their payments through the available prepayment organizations such as Health Maintenance Organizations. Through Federal government imposed restrictions and limits, every state is provided with a broad option within which it can determine its mode of payment for Medicaid services. These set payments should be enough to attract a good number of providers so that the services covered may be available to a majority of the population within that locality.

Medicaid providers are required to receive payment rates as full payment, and states are required to make additional payments to medical institutions that offer inpatient services to Medicaid beneficiaries and other uninsured persons, including low income earners under the “disproportionate share capital”.

States are allowed to introduce small deductibles and co-payments on some beneficiaries for various services. However, recipients such as pregnant mothers and children under 18 years are not allowed to cost share, and all recipients in general are not allowed to cost share emergency and family planning services.

A share of Medicaid expenses incurred is catered for by The Federal government under the medical program established by each state. This share is referred to as Federal Medical Assistance Percentage (FMAP), and it is determined through a formula that basically compares the average income level of that state, with the average income level of the nation as whole. It is important to note that the states with a high income level are compensated a smaller fraction of the costs. In addition the federal government provides financial assistance by sharing in each state’s Medicaid program expenditures.